State Consumer Disputes Redressal Commission
Christie Auto Embroidery, Rep.By ... vs Asst.General Manager, State Bank Of ... on 4 December, 2013
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE : HONBLE THIRU.JUSTICE R.REGUPATHI PRESIDENT THIRU.A.K.ANNAMALAI JUDICIAL MEMBERC.C.NO.25/2010
DATED THIS THE 4th DAY OF DECEMBER 2013 Date of complaint :12.04.2010 Date of order :04.12.2013 Christie Auto Embroidery, Rep.by proprietarix Mrs.K.Ramani, M/s.T.V.Badrinarayanan No.B-17, Rajaram Colony, Counsel for Complainant Kodambakkam, Chennai-24.
-vs-
Asst.General Manager, State Bank of India, SME City Credit Center, M/s.P.D.Audikesavalu 16, Whannels Road, Egmore, Counsel for Opposite party Chennai 600 008.
The complainant filed a complaint before this Commission against the opposite party praying for a direction to the opposite party to pay a sum of Rs.22,50,000/- Release and disburse amount under loan sanctioned, to pay Rs.5,00,000/- towards loss of income with 12% interest, to pay Rs.1,25,000/- towards future loss of income and to pay Rs.1,00,000/- towards compensation for the mental agony with 12% interest and to pay Rs.25,000/- towards costs. This complaint coming before us for final hearing on 13.09.2013 and heard the arguments on either side, this Commission made the following order:
A.K.ANNAMALAI, JUDICIAL MEMBER The complaint under Section 17 of the Consumer Protection Act.
1. The complainant filed this complaint claiming some reliefs and compensation for mental agony caused to complainant with costs.
2. The brief fact of the complainant is as follows:-2-
The complainant is a proprietary concern represented by Proprietarix Mrs.K.Ramani, registered as a small and medium industries in the field of embroidery and button stitching for exports garments. The complainant for the purpose of purchase of computerized embroidery machine and khaja stitching machine applied for a loan of Rs.24,00,000/- on 14.8.2009 and on the basis of total invoice amount of Rs.30,08,000/- after due processing and scrutiny the opposite party sanctioned a loan of Rs.22,50,000/- repayable with interest at 12.5% p.a. in 60 EMIs of Rs.37,500/- each starting from January, 2010. For the same the complainant deposited all the original title deeds of the complainants daughter as equitable mortgage by way of memorandum of deposit dated 24.9.2009. For the purpose of loan sanctioned all the necessary documents were furnished. When the complainant approached AGM for release of the amounts under the sanctioned loan they have evaded the same for no fault of the complainant. Hence, the complainant after issued legal notice dated 7.12.2009 a reply dated 9.12.2010 was issued by the opposite party by alleging that the documents for the purchase of machine and reference for employment orders etc are all exaggerated, fabricated and on the basis of the same the loan account was not released. Further the equitable mortgage executed by the complainants daughter alleged to be a minor on the basis of ration card issued for the year 2005-2009. Till the date of complaint the registered mortgage date has not been cancelled. The contact of the opposite party in not releasing the loan amount after sanctioned the amount to arbitrary action against the principles of natural justice.
Thereby the complainant met with business loss -3- around Rs.1.25 lakhs per month and suffered mental agony and thereby claiming to release the loan amount sanctioned for Rs.22,50,000/- with 12% interest, Rs.5,00,000/- towards loss of income with 12% interest, to Rs.1,25,000/- towards future loss and Rs.1,00,000/- towards mental agony with 12% and to Rs.25,000/- as costs.
2. The opposite party denying the allegations of the complainant except to admit the sanction of loan of Rs.22,50,000/- and contended that the loan was not released on the basis of investigation and verification reports regarding the voucher submitted by the complainant for purchase of machines and the particulars relating to the prospectus submitted by the complainant on the basis of arbitrator. On verification the cost of embroidery machine and button stitching machine was mentioned for Rs.30,08,000/- and on verification from the very same dealer and for motor manufacturer etc which is found that the cost of Embroidery machine was around Rs.6,00,000/- in Indian money and the Abirami Garments from whom the complainant produced the letter to show expected work orders was a Training Institute teaching tailoring and was not dealing in any embroidery works and the experience certificate issued to the employee created doubt about the genuiness and discrepancies and hence the loan was not released and the reply was given on 9.2.2010 stating the reasons for not releasing the loan and further the nature of business being the commercial business and the complainant cannot be a consumer under Section 2 (1) (d) (ii) of the Consumer Protection Act, 1986 and also the equitable mortgage was cancelled since the loan was not released. This opposite -4- party is absolutely within its rights to withhold disbursement of any loan at any stage on coming to know the facts affecting the viability of the project for which such loan sanctioned. Hence, there is no deficiency in service on their part and the complaint is to be dismissed.
3. In the enquiry both sides have filed their proof affidavit and on the side of the complainant Ex.A1 to A21 were marked and on the side of the opposite party Ex.B1 to B9 were marked.
4. The points for consideration are :
1. Whether the complainant is a consumer under Section 2 (1) (d) (ii) of the Consumer Protection Act, 1986?
2. Whether there is any deficiency of service on the part of the opposite party in not disbursing the sanctioned loan amount of Rs.22,50,000/- as alleged ?
3. If so, to what relief?
5. POINT NO.1 : The complainant being the Proprietarix having business in Small and medium industries in the filed of embroidery and button stitching for exports garments in computerized embroidery machine with a view to start the automated embroidery and button stitching service applied for a loan of Rs.30,08,000/- on the basis of supporting documents and by deposits title deeds. The opposite party stated these dealings are in the nature of commercial purpose for meeting the business. Whereas from the materials and contentions of both sides the complainant alleged regarding the deficiency of service relating to the sanction of loan and even after sanction of loan the loan was not disbursed due to certain -5- discrepancies as alleged by the opposite party the complainant has come forward praying for release and disbursement of loan and for other compensation which we are of the view cannot be construed as commercial purpose and the complainant in support of their case relied upon the following rulings reported in 1997 SCR-2-50, 1997-SCALE-2-240 and (2).. (1983) 3 Supreme court Cases 379 in similar nature of cases. We are of the view that the complainant can be a consumer under Sec.2 (1) (d) and the opposite party being a service provider under Section 2 (1) (o) of the Consumer Protection Act, 1986 and this point is answered accordingly.
6. POINT NO.2 : It is the admitted case of both sides that the complainant has applied loan for Rs.30,08,000/- on the basis of all supporting documents for the purpose of purchase of embroidery machine and the opposite party also after scrutiny and process sanctioned with a sum of Rs.22,50,000/- as term loan as per the sanctio9n order under Ex.A10, Dated 16.09.2009 and on that basis also memorandum of equitable mortgage was also executed by deposit of title deeds on 24.09.2009 by Ms.K.Kamalini, daughter of the complainant on 24.9.2009 and since the disbursement of the loan not made the complainant approached the opposite party and after issuing legal notice on 7.12.2009 under Ex.A13 and only on 9.12.2010 sent a reply under Ex.A14 stating that the voucher given for the quotation under Ex.A5 and invoice under Ex.A6 and other letters under Ex.A8 and A9 etc are all verified about their genuineness, they came to know that those figures are exaggerated for the purpose of claiming higher amount of loan and prospective of buyers address are not really buyers only training institute teaching tailoring not dealing in any embroidery work. We found expert service filed by the complainant under Ex.A2 the opposite party found no such company in the address dealing and also the equitable mortgage executed by the complainants daughter to be a minor at the time of execution of title deeds. On the basis of the ration card for the year 2005-2009 only about this years and not 25 years as alleged. Hence the opposite party has not able to disburse the loan for these the complainant subsequently by way of experts and expenses obtained necessary loss from the concerned dealer who has originally issued the voucher for the purchase of machine under Ex.A5, A6 and for the purchase of the for the existing of Abhirami Garments under Ex.A16 to A20 to prove the allegation of the machine and contended that without taking all other accessories, compensation, transportation etc from the foreign manufacturer and if at al the machine was without such verification and thereby he came to file for the deficiency of service.
7. On the basis of both sides materials, averments and arguments we find that the opposite party has sanctioned the loan as per the documents under Ex.A10, dated 16.09.2009 and on the basis of the same mortgage deal by way of memorandum of deposits of title deeds for equitable mortgage was executed on 24.09.2009 under Ex.A11 till 7.12.2009 after issue of legal notice under Ex.A13 no loan was released or any receipts for the same was made by the opposite party and only by way of reply under Ex.A14 the non release of loan was informed alleging -7- various reasons. On the basis of investigation report and other documents obtained under Ex.B1 to B9 alleging that the complainant claimed loan amount was fabricated and was a training institute teaching tailoring and was not dealing any embroidery works. Etc. Any prudent bank being the financial institution dealing money especially State Bank of India could not have follow the procedure by paying the cheque before the order, while sanctioning the loan, that too to the extent of Rs.22,50,000/- without proper scrutiny, process and investigation and without following such procedure they have sanctioned the loan under Ex.A10 dated 16.09.2009. When the loan was made one month earlier ie on 4.8.2009 and thereby they have not explained while such an hurry was made. Even after sanctioned of the loan at the time of giving equitable mortgage title deeds was obtained as a registered documents and the rectal of the document under Ex.A11 mentioned that the deed executed as 25 years and the photograph was also affixed on the reverses of the endorsement of the concerned registered authority and in such circumstance simply on the basis of the alleged ration card for the year 2005-2009 age was mentioned as 12 years, and the Xerox copy of the ration card at the time of executing all was only 16 years. This was not verified when the deed was execute and thereby in its aspects also negligence was also proved. No doubt the opposite party being the authority for granting of loan have right to reject or not in using the loan at any stage.
But that must be exercised in a rightful manner without making embarrassment or trouble to the customer after making to run pillar to post for -8- several months in getting such loan such refusal without any valid reasons that to after legal notice issued by the complainant certainly amounts to deficiency of service for which the complainant suitably have to be compensated. Accordingly we answered this point that the opposite party is any deficiency of service in granting the loan to the complainant.
8. POINT NO.3 : In view of the findings in Point Nos.1 & s in favour of the complainant, the complainant is entitled for the justifiable compensation for not realizing of loan amount after sanctioned by the opposite party which lead to deficiency of service. The complainant in their complaint prayed for release and disbursed the amount under the term loan sanctioned by the opposite party by their letter dated 16.6.2009 for a sum of Rs.22,50,000/- and another sum of Rs.5,00,000/- with 12% interest for the loss of income and future loss of Rs.1,25,000/-, for Rs.1,00,000/- towards mental agony with interest at 12% interest and to pay Rs.25,000/- as costs. Regarding those prayers are concerned the prayer for release and disbursement of sanctioned loan for Rs.22,50,000/- cannot be ordered since the bankers right to reduce the payment of sanctioned loan at any time before the disbursement of the loan if they are not satisfied for the same, due to various reasons whether they are ascertained before sanction of loan or after sanction of loan in which the Consumer fora or commission given interfere unless it is true that such refusal or failure due to malafide intention. In our case we have come to the conclusion that the opposite party has failed to ascertain proper reason -9- for sanctioning of the loan for non disbursement of loan as deficiency of service and hence handed over that loan direction is justifiable.
Likewise regarding the prayer for Rs.5,00,000/- and Rs.1,00,000/- and Rs.25,000/- with interest for the loss of income and future loss of income are all cannot be considered by this Commission and that award itself was not available such loss cannot be construed.
As far as the compensation for mental agony because of the deficiency of service is concerned since we have held that there is deficiency of service and negligence in sanctioning the loan applied by the complainant and after sanctioned, failed to disburse the same because of the complainants materials not satisfied with the opposite party.
Hence we are of the view that a sum of Rs.1,00,000/- as compensation could be awarded which ends of both sides and also a sum of Rs.10,000/- as costs. Accordingly In the result, the complaint is allowed in part. The opposite party is directed to pay a sum of Rs.1,00,000/- as compensation for mental agony ordeal of the complainant for non disbursement of the loan after sanctioned to the complainant To direct the opposite party to pay a sum of Rs.10,000/- a costs to the complainant.
The above directions shall be complied within a period of 6 weeks from the date of this order.
A.K.ANNAMALAI R.REGUPATHI (J) MEMBER PRESIDENT -10- LIST OF DOCUMENTS FILED BY THE COMPLAINANT :
Sl.No. Date Description of documents Ex.A1 07.01.1993 Copy of certificate of Training Ex.A2 17.05.2003 Copy of Certificate by Almighty apparels Ex.A3 28.02.2008 Copy of Price bid by the National Industries Corporation Ltd Ex.A4 07.08.2009 Copy of SSI Certificate Ex.A5 10.08.2009 Copy of Quotation with covering letter by M/s.Tower Engineering Works Ex.A6 10.08.2009 Copy of Proforma Invoice by M/s.Bharathi Industries & Machine Corporation Ex.A7 14.08.2009 Copy of Application for Loan with enclosures Ex.A8 26.08.2009 Copy of Letter of Intent for work order by M/s.Abhirami Garments Ex.A9 07.09.2009 Copy of Proforma Invoice by Jaya Apparels Pvt.Ltd Ex.A10 16.09.2009 Copy of Letter of sanction by opposite party Ex.A11 24.09.2009 Copy of Memorandum of Equitable Mortgage Ex.A12 12.11.2009 Copy of Information from Dist.Rural Devt.Office, Kanchipuram Ex.A13 07.12.2009 Copy of Lawyers notice Ex.A14
09.02.2010 Copy of Reply for opposite party Ex.A15 12.03.2010 Copy of Certificate relating to M/s.Abhirami Garments Ex.A16 08.06.2011 Copy of letter to Almighty Apparels with acknowledgment Ex.A17 08.06.2011 Copy of letter to Abhirami Garments Ex.A18 13.06.2011 Copy of Reply by Abhirami Garments Ex.A19 05.08.2011 Copy of Quotation by Siddarth Sewing company Ex.A20 Photographs of Almighty Apparels Ex.A21 Photographs of Abhirami Garments LIST OF DOCUMENTS FILED BY THE OPPOSITE PARTY :
Sl.No. Date Description of documents Ex.B1 10.08.2009 Copy of Quotation for embroidery machines Ex.B2 26.08.2009 Copy of Letter informing issuance of Work orders -11- Ex.B3 17.05.2003 Copy of Experience Certificate Ex.B4 13.10.2009 Copy of e-mail letter Ex.B5 13.10.2009 Copy of e-mail letter Ex.B6 14.10.2009 Copy of Proforma Invoice for embroidery machines Ex.B7 15.10.2009 Copy of Letter Ex.B8 15.10.2009 Copy of Inspection Report Ex.B9 09.02.2010 Copy of Reply notice A.K.ANNAMALAI R.REGUPATHI (J) MEMBER PRESIDENT INDEX ; YES / NO VL/D/PJM/ORDERS